Lawyer gets 30 months in real estate scam

Michael P. Mayko

Updated 9:11 pm, Friday, May 31, 2013

NEW HAVEN -- He was the first to cooperate and the last to be sentenced.

In between, Joseph Kriz, a 50-year-old real estate lawyer and certified public accountant, threw away both careers to help longtime fraudster, William Trudeau, finesse a scam to make millions in Fairfield County's burgeoning real estate market.

But then, the housing bubble burst and their plans crashed, causing nearly $8 million in losses to banks, mortgage brokers and title insurers.

On Friday, U.S. District Judge Janet C. Hall sent Kriz, a Wilton resident, to federal prison for 30 months beginning Aug. 7.

Kriz faced more than triple that time and may have gotten it had he not been the first to go to the FBI, expose the scheme and begin wearing a wire as part of his cooperation.

"He's the one who brought the whole scheme to light," said James Diamond, Kriz's lawyer. "He turned over all his files to the FBI and to the title insurance firms."

As part of a plan to build multi-million dollar homes in Westport, Trudeau, a convicted felon, began buying homes in the Westport area through companies he and Kriz had created. But when money became tight, Kriz kept the funds flowing by raiding escrow accounts he held for his clients, some of whom lived in Ansonia, Darien, Milford and Westport.

One of the victims who testified at Trudeau's trial last fall was Christopher Coyle, a retired Westport assistant fire chief who sold a home he owned in Westport to Trudeau for $550,000. As part of the sale, Coyle provided a $275,000 mortgage to Trudeau, which was never paid.

"No homeowner lost a dime," Diamond said. "This case showed the importance of title insurance."

Diamond said title insurance companies paid out about $3.5 million and a Connecticut lawyers' security fund chipped in another $1 million. But Chase, Citibank and the defunct Washington Mutual and IndyMac lost millions of dollars.

Along the way, Kriz surrendered his licenses to practice law and work as a CPA.

"Joe never profited from this fraud," said Diamond, adding that Kriz has known Trudeau his entire life. "Trudeau set up the whole scheme. Joe should have known better."

Trudeau might be better known for his role in the Newtown Oil fraud case, in which he failed to deliver on $260,000 in pre-paid oil contracts during the brutal winter of 2002, and for his work with the FBI in nailing his former lawyer turned Superior Court Judge, Daniel Brennan, on a false statement charge.

Still, Diamond said if Kriz had not come forward and testified against Trudeau in this case, the prosecution may not have been able to send the man, whom Judge Hall said earned a "Ph.D. in fraud," back to prison.

"The jury only convicted Trudeau on two of nine charges," Diamond said. "Joe's testimony made the difference."

As a result of the convictions in this case, Hall sentenced Trudeau to 15 years, 8 months in prison. Hall also sentenced Trudeau's wife, Heather Bliss, to 30 months in prison.

Additionally, the judge sentenced Fred Stevens, a mortgage broker, to one year and a day in prison, and imposed two-year probation terms on Thomas Preston, an appraiser, and John Bryk, a Trumbull lawyer.